Travel and expense management
What is travel and expense management?
Travel and expense management refers to the process organizations use to handle all costs incurred by employees during business travel. This includes money spent on transportation, accommodation, food, and incidental expenses. It also involves establishing policies, recording expenses, gaining visibility into spending, and reimbursing employees for the money they spend during travel.
What are the key aspects of travel and expense management?
Key aspects of travel and expense management include:
Travel policy compliance
This policy details expectations for employees during business travel. HR teams should ensure that all employees who travel for the organization comply with the policy.
Approvals
Approval workflows should be in place to ensure that all travel requests, expense receipts, and reimbursement claims are reviewed by the concerned representatives.
Expense tracking
The travel and expense management process should include proper means to capture employee expenses and file them into different categories, such as transportation, food, and accommodation.
Reimbursements
Employees should be reimbursed for business-related expenses. Your travel and expense management should have a clear process in place to collect receipts, approve them, and process reimbursements on time.
Cost control
Business travel can be expensive. Have a team member monitor employee spending trends and set reasonable budget limits on hotels, airline fares, and more.
Reports
Reports can be really useful when tracking spending trends by employee, project, or department. In some cases, they can also highlight areas for cost reduction and even track if the travel has been bringing the expected ROI.
What does a travel and expense management policy include?
Your travel and expense management policy should include the following:
Purpose and scope
In this section, clearly explain the purpose of the travel and expense management policy. Help employees understand that the primary goal of this policy is to provide clarity on how company funds should be used during business travel. Elaborates on the different types of expenses that are allowed, the process for getting travel approved, and the steps involved in submitting reimbursement requests.
Booking guidelines
Use this section to give employees clarity on their pre-trip process. Provide information on how they can request, book, and confirm their travel and accommodation. Mention how many days or weeks in advance employees have to submit their travel requests. If employees have to make travel arrangements themselves, list the approved platforms, vendors, airlines, and hotels.
Expense categories
Here, outline the expense categories—such as food, transportation, and internet—and specify how much money employees can receive in advance before their travel. If there's a daily spending cap and a per diem, mention that too. If possible, include the list of non-reimbursable expenses, including local sightseeing, alcohol, chocolates, fines, and other personal expenses.
Approvals
In this section, explain the approval process for business travel and other reimbursements. Share who approves travel requests and whom to contact in case of an emergency or escalation.
Reimbursements
Under reimbursements, explain which expenses can be reimbursed, the tool employees should use to submit their claims, the documents required to support their claim, the timeframe for submitting requests, and how reimbursements will be disbursed.
Traveler safety
Use this section to list all the measures that you've taken to ensure employee safety during business trips, including travel insurance, secured travel options, and more. List the guidelines for late-night travel, too.
What are the best practices for acing travel and expense management?
- Use the following tips to enhance your employee travel and expense management process:
- Establish a clear policy that pinpoints what is expected from employees during business travel.
- Streamline the entire process with pre-trip approvals, timely reimbursements, and deadlines.
- Establish good relationships with reliable vendors for travel arrangements and accommodation. Negotiate with them for better prices.
- Make use of corporate cards to track expenditures effectively.
- Conduct regular audits to track spending and identify ways to cut costs.
Can travel and expense management be automated?
Yes, travel and expense management can be automated with the right software. Employees can submit their travel requests, get approval, explore trip options, download tickets, submit expense claims, and receive reimbursements, all from a single application.